The following correction was printed in the Guardian's Corrections and clarifications column, Saturday May 20 2006

In the article below, we incorrectly named LC Services Limited as being the steel company that had withdrawn from working for Oxford University because of fears of harassment and intimidation by animal-rights extremists. LC Services is not a steel company and was not the author of the letter referred to in the article. We apologise to LC Services for our error.

A major contractor has withdrawn from working for Oxford University because of fears of harassment and intimidation by animal rights extremists, it emerged yesterday. The steel company said it would stop working at the university because of the targeting by animal rights activists last week of shareholders in the pharmaceutical company GlaxoSmithKline and after the case of the desecration of the grave of an old woman whose family ran a guinea pig farm in Staffordshire.

Documents submitted to the high court yesterday seen by the Guardian give details of the campaign by the Animal Liberation Front against firms working for the university, which the ALF claims has caused more than £6m of damage.

The court papers reveal how extremists have made night-time pursuits of individuals working on a new £18m research laboratory in an attempt to identify the companies they work for or their home addresses.

Jennifer Gregory, who manages the contractors at the university, said in a witness statement that all the firms and suppliers operating at Oxford are working in fear because of threats by animal rights activists who have spent more than two years trying to stop the laboratory being built. Since the end of last year at least four companies have withdrawn from contracts, the documents reveal. Two other firms have been physically attacked. Oxford Architects had its buildings and cars daubed with paint and paint-stripper in January, and a month later activists targeted the home of the director of Monarch Freight, a university supplier.

The documents were presented to the court as evidence to support an application by the university for an injunction to push protesters back behind a four-square-mile exclusion zone. The university also wants demonstrations to be reduced to one hour once a week without the use of klaxon horns or megaphones.

In a letter to the university the steel company explained why it decided seven days ago to pull out of a contract. "This decision has not been taken lightly," the letter states. "Adverse publicity, namely the Glaxo share ownership scare and the ... Gladys Hammond exhumation ... led to discussion at board level culminating in consensus to withdraw" so that "all of us can sleep easily at night".

The letter went on to explain that the directors were frightened of personal and local retribution against individuals and shareholders by a "well-organised and devious group of people who will stop at nothing to register their misguided opinions by harassment towards people and damge to property".

Work on the laboratory resumed in November with a new contractor after the original firm, Montpelier, pulled out after threats from animal extremists. A month earlier scores of firms and suppliers working for the university had received letters threatening to target them and warning that ALF had already committed £6m worth of damage.

The new contractor and subcontractors have maintained their anonymity amid tight security and the requirement that workers wear masks on the site. But in a statement to the court Ms Gregory detailed 13 cases over the last five months in which site workers have been followed by activists and photographed in an attempt to identify them, or incidents where workers have been approached to reveal details about the contractors working on site. In one instance an individual was followed for four miles before the pursuit car was stopped by police.

Ms Gregory said: "It is clear that animal rights activists are taking considerable steps to find out who the contractors are and I fear that if and when they do so a massive campaign of criminal damage may be directed at them."

Charles Flint QC, for the university, said: "The evidence presents an overwhelming picture of real distress, alarm and harassment."

But John Curtin, a veteran animal rights protester, objected to the restrictions on his civil liberties and ridiculed the attempt to stop demonstrators making any noise at their weekly protests.

He said in court: "This is one of the most controversial projects in the country and today the full weight of the law is being used against us. They can argue they are trying to stop people being harassed, but the gist of this whole campaign [by the university] is to stop people from standing outside that site with banners. That is what they don't want."